"European integration and pension policy in the Netherlands and Germany"

Abstract

This paper investigates the impact of European integration on pension arrangements in two member states, the Netherlands and Germany. I examine the impact of three types of EU pressures on pension politics: EU gender equality law; the EMU convergence requirements concerning budget deficits and public debt; and increased discipline wages, including pension costs, because of the internal market. In order to identify and conceptualize the domestic-level processes that translate EU pressures into domestic policy change, this paper draws on recent work that emphasizes the relationship between EU incentives/standards and existing domestic policies, as well as the structure of domestic institutions. Thus, the paper attempts to join arguments about EU adaptation pressures with the existing literature concerning welfare state change in order to identify the conditions under which Europeanization is likely to lead to domestic pension policy change. I treat Europeanization as a pressure that is broadly similar in its domestic political effects to other pressures for pension policy change, such as population aging, demographic change, changes in employment patterns, and general economic austerity. Domestic actors’ responses to European pressures thus involve political bargaining about the distribution of the costs and benefits of adjustment. This political bargaining, or the pension-political game, is shaped by actor interests and the institutional context of pension policy decision-making.